Following last week's public hearing of the Joint Select Committee on Constitutional Recognition of Local Government to hear evidence regarding the case for recognising local government in the Constitution, the Committee yesterday released a preliminary report recommending that a financial recognition referendum be held at the same time as the 2013 federal election.

The report asserts that recent cases in the High Court have created "considerable uncertainty about the Commonwealth's power to provide funding directly to local government" and that "a successful referendum would return Australia to the widely understood status quo that existed before those recent High Court cases, and ensure the needs of communities are met through the continuation of important programs like Roads to Recovery".  

ALGA issued a media release to publicly welcome the recommendations of the preliminary report.

"ALGA welcomes the preliminary report's recognition of the constitutional vulnerability of direct payments to local government through programs such as Roads to Recovery, which are essential for all local communities," ALGA President, Felicity-ann Lewis said.

"We welcome the Committee's acknowledgment that the suggested words for a change to Section 96 of the Constitution to resolve financial uncertainty will not have implications for the state governments and their relationship with local government."

"It's important to note that the dissenting report offered by the Committee's Coalition members shares ALGA's concerns about the time available to complete the steps identified in the Expert Panel report to ensure the best chances of a winnable referendum.

"We welcome the Committee's recommendation that the Commonwealth begin all necessary preparatory activities to ensure a successful outcome for a referendum on financial recognition in 2013.

"The Government has said that it will not be responding to the Committee's findings until a final report is issued.  In the meantime, I have written to Prime Minister Julia Gillard and Opposition Leader Tony Abbott asking them to make a joint statement about the need for constitutional change proposed by the Expert Panel and supported by the Committee."

"I have also written to Local Government Minister Simon Crean to ask what the Government intends to do with regard to meeting the preconditions identified in the Expert Panel report and referred to in the Committee's preliminary report, particularly the need to engage the states on the proposed change to secure their support.

"The Expert Panel was of the view that the position of the states was critical and without an indication of their position, the success of the referendum would be in doubt.

"ALGA has been strongly supportive of the need for constitutional change as soon as possible to secure the continuation of direct federal funding to local government.  This can only be achieved through a successful referendum.

"Our concern is that delays in obtaining strong commitment from across the political spectrum at both the state and federal level, to a change to Section 96, have hampered efforts to finalise the requirements necessary for a successful referendum in 2013." 

The Joint Select Committee established by parliament to investigate the likelihood of Australians voting 'yes' at a referendum to recognise local government in the Constitution has heard that the prerequisites for a winnable referendum in 2013 are yet to be met.

The Terms of Reference for the inquiry reinforce that the role of the Committee is to assess the likelihood of success of a referendum on financial recognition in 2013, taking into account the report of the Expert Panel on Constitutional Recognition of Local Government, which was released in December 2011.

The recommendations of the Expert Panel recognised several preconditions for referendum success: the need for strong bipartisan support; the Commonwealth negotiating with state and territory governments to achieve their support for financial recognition; a public education campaign to achieve informed and positive community engagement; and changes to the referendum process to allow public funding of referendum campaigns.

In giving evidence on behalf of ALGA, Mayor Troy Pickard raised concerns that the preconditions for a successful referendum had not been satisfied and told the inquiry that state local government associations had agreed that the referendum should be held at a time that maximises the chances of success.

"It is our belief that there are four important prerequisites that must be met in order for a referendum to have the maximum chance of success," Mayor Pickard said.

"The first is strong, public bipartisan support.  The second is the Commonwealth negotiating with individual states.  To date, it is or understanding that that has not occurred.  Indeed, from a number of states that have not taken a formal position on supporting the recognition of local government, it is due to the lack of words being presented as to the precise constitutional amendment."

"Another important prerequisite, is a public awareness campaign.

"The fourth and final prerequisite we believe is crucial to maximising the success of a referendum is a change to the Referendum (Machinery Provisions) Act 1984.  Our position proposes a change to the act would allow a publicly funded yes and no case but also a change to the act so that funding is allocated in accordance with the vote on the bill that supports the constitutional change in the House of Representatives."

When the Committee asked for advice on the amount of time needed to undertake an effective communications campaign in the lead up to a referendum, Constitutional Law Expert Professor George Williams offered: "I think the first and most important thing is that you need the Prime Minister and the Leader of the Opposition to say that we have a problem that needs to be fixed."

"Until you have got that, nobody is interested, frankly.  And that is where the media will see this as a non-issue."    

On the matter of the timing of a referendum, Political Scientist AJ Brown told the hearing: "My assessment as a political scientist would be that this is not the election to do it unless this committee can pull rabbits out of hats in terms of finding and articulating a level of consensus that we have not seen quite yet."

A total of 131 submissions have been received by the Joint Select Committee, with the vast majority of councils supporting constitutional change.  To view the submissions, click here.

Constitutional Law Expert, Professor George Williams has urged the Joint Select Committee on Constitutional Recognition of Local Government to ask Commonwealth agencies "what is their preferred fix" for safeguarding direct federal funding to a range of recipients under numerous Commonwealth programs.

ALGA is campaigning for constitutional recognition of local government to ensure local government bodies are recognised as legitimate recipients of direct federal funding.

ALGA argues that the continuation of direct funding of councils has been put at risk by the High Court's decisions in the Pape and Williams Cases, which raise concerns about the constitutional validity of direct federal funding provided to bodies which are not recognised in the Constitution.

The Committee is expected to hand down its recommendations in March on whether a referendum on the issue should be put at the same time as the 2013 federal election.

At the Committee's first public hearing last week, the broader issues of how the Commonwealth planned to ensure the legitimacy of all direct federal funding initiatives was discussed.

Professor Williams told the hearing that there was "another special question that the committee should ask the Commonwealth agencies".

He enquired as to "their proposed or preferred fix for all those other Commonwealth programs which have got nothing to do with local government - which are direct funding to community organisations, or business, or whatever, that do not have a head of power or that might not be supported by legislation; for example to the national schools chaplaincy program".

 He described the current legislation as "band-aid legislation" and encouraged the Committee to find out if there is "a  constitutional fix in addition to, separate from or independent of constitutional recognition of local government for that problem and all the non-local government related programs".

"My point is simply that ... it is a dangerous course for local government, in the longer term, to be dependent soley on grants via the states because there are imperatives that mean that the Commonwealth will likely fund some schemes only if it can do so directly." 

Over the course of the past five years, the Australian Local Government Association (ALGA) has been persistent in its campaign for constitutional recognition of local government.  Continuing this trend, the Association marked the start of the new year by presenting its case for constitutional reform to the Joint Standing Committee on the Constitutional Recognition of Local Government on 16 January.  Last week's public hearing was the first since the Committee was established by parliament late last year to provide state and territory governments and local government bodies with a platform to put their views to the Committee about the proposed wording for a constitutional amendment to recognise local government bodies as legitimate recipients of direct federal funding.

Since former Prime Minister Kevin Rudd made an election commitment to progress the issue of constitutional recognition of local government in 2007, the Australian Local Government Association (ALGA) has undertaken extensive work to advance the issue and identify the most appropriate form of recognition for local government in the Australian Constitution.  Local government concluded that financial recognition was the best option and ALGA maintains that this is the only way to protect direct federal funding for community services and infrastructure.

This view was shared by an independent Expert Panel appointed in 2011 by the Federal Government following the commitment of the Gillard Government in 2010 to hold a referendum on constitutional recognition.  It looked at all the options for recognition of local government including recognition in a preamble to the Constitution and more complex changes to confirm local government's status and role.  In the end it supported financial recognition, which had the broadest political support and the greatest chance of success at a referendum, but also set out some preconditions for a referendum, including engaging the state governments to achieve their support, a public education campaign and changes to the referendum process.

In 2011, ALGA called for a Joint Standing Committee on Constitutional Recognition of Local Government to be established because we saw it as an essential step on the path to a referendum on the constitutional recognition of local government.  ALGA is pleased that the Committee has been established and we appreciated the opportunity to appear before the Committee on 16 January to outline the option of financial recognition – changing the Constitution to ensure that the direct federal funding of local government can continue without questions of constitutional validity arising.     

The Joint Standing Committee has been tasked with assessing the likelihood of success of a referendum on financial recognition and yesterday handed down a preliminary report recommending a referendum be held at the same time as the 2013 federal election.  ALGA believes that the referendum should be held at a time which maximises the chances for success.  Success for ALGA will be a  referendum that is passed by a majority of voters in a majority of states, and a majority of voters overall -  the elusive double majority.  Holding a referendum, if unsuccessful, will achieve nothing and probably damage the standing of local government in the eyes of the community.

The Government has committed to a referendum on the recognition of local government by 2013.   ALGA welcomed that commitment but we believe that the promise should only be pursued if holding a referendum this year allows the maximum chance for success and there is adequate time for an effective campaign.  If the preconditions for a successful referendum identified by the Expert Panel and ALGA cannot be met in time for a referendum to be held this year then ALGA would call for the referendum to be held as soon as practicable after 2013 when those preconditions can be satisfied. 

Mayor Felicity-ann Lewis
ALGA President